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Japan’s Decision on Increasing Sales Tax to Resonate Globally

Choice of Growth Versus Paying Down Debt Will Inform Other Mature Nations

By

Jacob M. Schlesinger

Oct. 12, 2014 5:21 p.m. ET

TOKYO—The International Monetary Fund slashed Japan’s growth forecast last week and put its recession odds at 1 in 4, citing a bigger-than-expected hit from a national sales-tax increase this past April. The IMF also noted Japan’s “very high public debt” and said a second tax hike, scheduled for next year, was “critical to establish a track record of fiscal discipline.”